We’re still in the first quarter of 2019 and already real estate’s race to the peak of the “technology mountain” has us thinking back to the history books and the Cold War Space Race. What a time to be alive! What a time to be in real estate! Kinda...
Unless you live under a rock you have undoubtedly heard this week’s news: Compass acquired real estate CRM provider Contactually (for what is now a reportedly $50M). Fun Fact #1: Contactually had quietly been powering the Compass CRM for about a year prior to this bombshell. This has assuredly become a disruptive time for any Contactually client.
While we at Propertybase commend Zvi and his team at Contactually for their success (which drove us to improve our real estate CRM Every.Single.Day), the news created a whirlwind of reactions, questions and concerns which we’re happy to share.
Real Estate CRMs Are a Key Cog in the Industry
If it isn’t already evident, let’s clear things up. It certainly isn’t a matter of “if” and “when” technology will disrupt and change the industry, because the if and when are happening right now. Yes, we may sound like a broken record, but utilizing a real estate CRM is an essential part to managing leads and clients that enhances that real estate intangible: relationships. Consolidating and implementing better technology means less paper trails, less logins, more adoption and increased productivity. All of which lead to more closed deals. The move by Compass simply reinstates this.
Compass is building a next-generation real estate brokerage that has consistently marketed its technology investment and innovation. Just over a year ago, CEO Robert Reffkin announced Compass would build it’s own CRM as part of their ambitious expansion initiatives. Flash-forward a year later and they have realized they cannot innovate fast enough to catch up to technologies that already exist. So, in that sense, this acquisition makes lots of sense.
What Does This Mean For Contactually’s Data, Development & Current Customers?
Contactually and Compass have stated that the infrastructure of both systems will remain separate, with data stored (and not shared) on independent servers. But frankly, the topic of sharing data isn’t so black and white. With recent revelations in a Wall Street Journal article about apps providing Facebook with personal information, the topic isn’t going away anytime soon. Is it a stretch to believe that Compass will not leverage the data it now has access to?
Contactually customers are now struggling with the reality that a primary competitor is now in control of their technology stack and could potentially have visibility into a whole pipeline of agents that they could recruit away in every key market. The fact is, CRM’s should be one of the stickiest tools a brokerage can offer agents. Taking ownership of that beloved tool could be a recruitment method for Compass in itself. Why should your agents and their data be beholden to a competitor?
As far as product development, Contactually has not guaranteed support for independent brokerages beyond 2019 (read more in a Q&A from Contactually). A majority of Contactually’s engineering team will be responsible for building out Compass’ technology. This certainly raises some red flags.
Here are some important things to consider if you are a current Contactually customer:
Loyal Contactually customers should be concerned about any future innovation Contactually will provide them. With new ownership, who is to say that the latest and greatest features won’t be pushed to Compass users first? What if they don’t go to Contactually at all? Nothing could be more disruptive to today’s brokerages than being frankly forgotten about by their CRM/tech provider.
A competitor now owns your CRM. Making the move from Contactually should be on your radar sooner rather than later. Jumping ship now instead of in a year or two would mean that you’re fully ramped up on a new CRM (that you can stay on for years to come) by the time you’d be looking for something new.
- Compass is now creating a silo-ed technology environment for agents. This screams if you can’t beat em, join em! (Or, in this case, acquire em!). Fun Fact #2: We’ve been at this game a long time - 10 years in fact and we’re not going anywhere. So contact Propertybase to hear what we’ve learned about creating a foundational platform with an abundance of integrations that will stay independent.
What Does This Mean For Your Authentic Brand?
Broker/Owners and many of real estate’s leaders have built strong brands who believe in their core values. They’re unique in each and every way. So, what will happen now to brands with technology partners owned by a competitor? Easy - that technology is no longer authentic to the brand.
Fun Fact #3: Propertybase has done wonders for over 2,000 brokerages around the world who see value in a trusted, independent tech partner. We aren’t owned by anyone but ourselves and our configurable platform has a singular goal: to simplify the business of real estate - for everyone and anyone!
Needless to say, the landscape of real estate is rapidly changing. Those who come out winners will have found the right tech partner, one that is agnostic amongst all the others.